Student Question

Discuss a time when you decided against purchasing something that was priced the lowest. What factors went into your decision to pay the higher price?

Expert Answers

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Assuming that the products are identical except for their price, there are times when a person might buy the more expensive item. One factor might be the difference in customer service between the stores that are selling the product. If a person wants really good customer service with favorable return policies, that person might be willing to pay more for this. An example would be two grocery stores that sell the same products. One store bags the groceries and will help bring them to your car. The other store requires you to bring your own bags and to bag all of your groceries yourself. Some people would pay more for the higher level of service.

Another factor might be convenience. If a person has little free time, it might be easier to purchase the product at a store closest to where the person lives or works. If a person has to drive a significant distance, it might not be worth the time to drive that distance to save a few dollars on an item. There is also the cost of driving the additional distance that needs to be factored into the decision.

Loyalty would be another factor. If a person has done business with a specific company for many years, that person might pay more for a product. Loyalty can be rewarded in many ways. These include lower prices on other items, participation in a rewards program, and better service. I use the same heating/cooling company even though it may cost a little more. However, I get priority service when an issue arises, and sometimes they don’t charge me for something minor because I have been with them for a long time. The same is true for the home remodeling company I use. They often repair things for free because I have used this company many times for home improvement projects.

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